An Empirical Analysis of the Factors that Influence Infrastructure Project Financing by Banks in Select Asian Economies
Abstract
Description
This paper analyzes a critical aspect of expanding private finance to infrastructure by examining the role of bank lending to public–private partnership (PPP) projects through the project finance modality.
The paper examines the factors influencing bank lending to infrastructure projects in key Asian countries. The focus is on projects developed through the public–private partnership (PPP) modality. The analysis indicates that banks largely base lending decisions on macroeconomic factors rather than on project finance considerations. The results accordingly suggest that the project finance modality has not yet been mainstreamed into the general financing considerations of Asian banks. Thus, policy makers may focus more on reducing macroeconomic risk in order to expand the scope of bank lending to PPP infrastructure projects.